The New Distributed Energy Shareholders

Everything written here is my personal opinion and does not represent the position of my employer or any of its clients. The reader may not construe anything on this website as representing any entity other than the author.

Intro (Part 1 of 7)

Renewable energy is better. It’s cheap, it cuts back our carbon emissions, and it doesn’t depend on a steady supply of fuel to do the job of electricity generation. But the full impacts of a renewable energy transition, we are told, will expand far beyond the everyday operation of the electric grid. Unlike the fossil fuel economy, which sacrifices vulnerable populations to nasty air quality and industrial borderlands for the grid’s “greater good”, the modularity and low operating costs of renewables offer an opportunity for clean, dynamic communities and wealth building.

However, these broader societal benefits are not automatic results of having renewable energy. All industrial development, whether it’s a coal mine or a solar farm, will impact those living near it. Of course, your average solar farm doesn’t produce nearly as much noise, water, or air pollution as your average coal mine: solar hurts much less. Just as important, though, is how much the solar actually helps. The climate benefits of renewable energy are equally shared by all humanity. Economic empowerment, on the other hand, requires that some benefits accrue uniquely those impacted by the creation or operation of the energy asset.

Renewable energy developers have found many creative ways to turn energy assets into community assets. Principled leadership and superior technology are no doubt factors in this success. However, such collaborative approaches are still niche applications within renewable energy development. A majority of developments still use more traditional approaches, where appeasing the impacted population is merely a means to unlock the renewable resources near them. Yes, in many cases this arrangement works well. Landowners get a share in the profits. Consumers get lower energy bills. But appeasement alone is unsustainable. There are too many tradeoffs that developers must make with communities in order to build all the generation, storage, and transmission that we need. In more and more cases, people will need a sweeter deal than local tax revenue or a handful of jobs to make up for the sacrifices that developers and governments will ask them to make. While it is a nice-to-have now, local economic opportunity will become a requirement for many of the energy projects required to save our planet.

These renewable energy assets should create capital for the communities impacted by their installation. To enable this, developers must create replicable business structures that systematically split asset ownership between themselves and community owners. But this is not charity: the involvement of community shareholders can reliably serve as a concrete, nonfinancial investment in a project which justifies ownership. In fact, a value of community involvement in an energy project will soon by codified by the U.S. federal government in tax credits from the Inflation Reduction Act, although additional value streams exist which do not depend on any government’s policies.

In this inaugural season, my blog Unapparent Power will justify and clarify these claims, and lay out a roadmap for a future energy system whose benefits are spread beyond the traditional concentrations of energy wealth. In the next 6 or 7 posts, we’ll discuss how community ownership meets the existential challenges of siting and community buy-in, and how this builds on inherent advantages of renewable energy technology. We’ll envision an ideal community co-ownership arrangement, and work from practical limitations and functional precedents to assemble a viable model.

This post makes sweeping claims with few references in order to introduce the issue. However, future entries will address these points in greater detail, and include sources which support the discussion. But this will not be at the expense of brevity: all posts will remain about the length of this one!

Please join me on this journey. I truly hope to hear your thoughts, questions, and corrections, so your experience can help me better understand how renewable energy really can empower us. Thanks!